Longmont sales/use tax up 4.5 percent

Uptick in construction boosts city coffers

By Scott RochatLongmont Times-Call

Posted:
03/02/2013 06:03:03 PM MST

Updated:
03/03/2013 03:09:28 PM MST

Francisco Capata wires together a reinforcing bar column at the construction site of the Roosevelt Park Apartments on Friday. Home and apartment construction helped push Longmont s sales and use tax collections up by 4.5 percent, according to year-end figures released this week. The city s totals came to $49.3 million, compared to $47.1 million in 2011. To see how the city's travel industry fared, see Page C1.
(
LEWIS GEYER
)

LONGMONT -- Longmont was building up its revenue in 2012. Literally.

Home and apartment construction helped push Longmont's sales and use tax collections up by 4.5 percent, according to year-end figures released lat week. The city's totals came to $49.3 million, compared to $47.1 million in 2011.

Of that, the biggest bump came in use taxes, easily the more volatile of the two. Use taxes are collected on building materials, manufacturing equipment and new-vehicle registrations, which tend to vary more widely from year to year than the retail sales covered by sales tax.

"Big time," finance director Jim Golden agreed. "As far as projecting a shift (in use tax), it can be really hard for us to anticipate."

Use tax collections went up by 11.7 percent in 2012, from about $7 million to about $7.8 million. A solid chunk of that came from residential construction, where developers pulled 160 single-family permits and 121 multi-family permits in 2012. The year before, single-family homes had 64 permits; multis had only two.

Golden said it looked like the resale market was thinning out a bit, though the home numbers were still a far cry from 10 or 12 years ago, when a year might see 1,600 home permits.

"Not anymore," he said. "The last four or five years have always been below a hundred."

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This time around, the numbers got a little help from the planned Roosevelt Park Apartments, which began construction in 2012. The development, which is bordered by Main and Coffman streets and Longs Peak Avenue, is planned to have 115 apartments and a parking garage, as well as restaurant and retail space.

But, Golden said, Roosevelt's just one part of a bigger picture. And it's that whole picture -- Roosevelt, plus all the residential construction, plus a jump in car registrations, plus business expansions like DigitalGlobe's -- that made 2012 an up year.

Misael Cortez-Cruz pours concrete for a storeroom floor at the construction site of the Roosevelt Park Apartments on Friday. Longmont developers pulled 160 single-family permits and 121 multi-family permits in 2012. The year before, single-family homes had 64 permits; multis had only two.
(
LEWIS GEYER
)

"When the (Twin Peaks) mall gets built, you'll see it as well -- but you can only see it once," Golden said. "It all depends on how the rest of the building action is timing itself from one year to the next."

That building action, by the way, is also the reason why the strongest-gaining category for use tax -- next to "general," anyway -- is lumber. That category went up 79.1 percent, bringing in about $1.7 million in 2012.

Sales tax collections saw a smaller, steadier rise, up 2.7 percent for a total of about $40.4 million. For every dollar collected, about 29 cents came from food, which was also one of the leading categories in the rise.

"We've seen some gradual, but continual growth in the staples, the retail staples that people have to spend money on," Golden said. "When you have a big negative swing in the economy, it sometimes touches those staples as well, but they come back faster than the luxury products."

Food saw a 7.9 percent rise in sales tax collections, with car sales close by at 7.8 percent. Home occupations had the biggest jump of any category (15.7 percent) but on a small base -- the city collected $165,078 from that area versus $142,641 in 2011. (By contrast, sales tax collections from food came to about $13.7 million.)

Any time the city beats its own projections for revenue, the money is held as "one-time" funds for the next budget -- in other words, money the city can't count on having twice.

"If nothing else, it gives us a stronger base to build on," Golden said. "That'll help 2014 for sure."

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